EXHIBIT 99.1
[OBJECT OMITTED] News Release
FOR IMMEDIATE RELEASE
October 21, 2003
Trustmark Announces 12.2% Increase in Third Quarter Earnings Per Share
Return on Average Equity exceeds 19%;
Board Increases Quarterly Dividend 15.2%
Jackson, Miss. - Trustmark Corporation (NASDAQ:TRMK) announced basic
and diluted earnings per share of $0.55 for the third quarter of 2003,
which represents a 12.2% increase compared to $0.49 for the third
quarter of 2002. Net income for the third quarter of 2003 totaled
$32.4 million. Trustmark's performance for the quarter ended September
30, 2003, resulted in a return on average assets of 1.71% and a return
on average shareholders' equity of 19.03%.
Basic earnings per share for the nine months ended September 30, 2003,
were $1.49, compared to $1.47 for 2002. Trustmark's performance during
the first nine months of 2003 resulted in a return on average assets
of 1.61% and a return on average shareholders' equity of 17.58%.
Earnings during the first quarter of 2003 included an after-tax charge
of $0.07 per share associated with the Company's Voluntary Early
Retirement Program. At September 30, 2003, Trustmark reported total
loans of $5.0 billion, total assets of $7.6 billion, total deposits of
$5.0 billion and shareholders' equity of $682 million.
Richard G. Hickson, Chairman and CEO, stated, "Our success in
providing banking and financial solutions is reflected in our third
quarter financial performance. Our return on average shareholders'
equity exceeded 19%, the highest level in Trustmark's history. During
the quarter, we entered the dynamic Destin and Panama City, Florida
markets with our purchase of seven branches with loans and deposits of
approximately $224 million and $209 million, respectively. The
demographics of the Florida panhandle represent an outstanding
opportunity for Trustmark to generate additional loan and deposit
growth in areas in which it does not presently have a leading market
share. These markets also afford us an excellent opportunity to
provide investment and risk management solutions."
The Board of Directors of Trustmark Corporation announced a 15.2%
increase in its regular quarterly dividend to $0.19 per share from
$0.165 per share. The Board declared the dividend payable on December
15 to the shareholders of record as of December 1, 2003. This action
raises the indicated annual dividend rate to $0.76 per share from
$0.66 per share.
During the first nine months of 2003, Trustmark repurchased
approximately 2.1 million shares of its common stock, including 513
thousand in the third quarter. At September 30, Trustmark had
authorization to repurchase up to an additional 3.8 million shares.
The repurchase program is subject to market conditions and management
discretion and will continue to be implemented through open market
purchases or privately negotiated transactions.
Trustmark Corporation is a financial services company providing
banking, investment and risk management solutions through over 140
offices and 2,350 associates in Mississippi, Tennessee and Florida.
For additional financial information, visit Trustmark's website at
www.trustmark.com.
Forward Looking Statements
This press release contains forward-looking statements within the
meaning of and pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. A forward-looking statement
in this press release encompasses any estimate, prediction,
expectation, projection, opinion, anticipation, outlook or statement
of belief included therein, as well as the management assumptions
underlying those forward-looking statements. Factors that might cause
future results to differ from such forward-looking statements are
described in Trustmark's filings with the Securities and Exchange
Commission. Trustmark undertakes no obligation to update or revise any
of this information, whether as the result of new information, future
events or developments, or otherwise.
TRUSTMARK CONTACTS
Investors: Zach Wasson Joseph Rein
Executive Vice President and CFO First Vice President
601-208-6816 601-208-6898
Media: Gray Wiggers
Senior Vice President
601-208-5942
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003
($ in thousands)
(unaudited)
Quarter Ended Sep. 30,
----------------------
AVERAGE BALANCES 2003 2002 $ Change % Change
- ---------------- ---------- ---------- --------- --------
Securities AFS-taxable $1,595,036 $ 827,947 $ 767,089 92.6%
Securities AFS-nontaxable 63,940 78,540 (14,600) -18.6%
Securities HTM-taxable 162,393 564,031 (401,638) -71.2%
Securities HTM-nontaxable 90,841 90,063 778 0.9%
---------- ---------- ---------
Total securities 1,912,210 1,560,581 351,629 22.5%
---------- ---------- ---------
Loans 4,933,252 4,587,012 346,240 7.5%
Fed funds sold
and rev repos 20,535 35,001 (14,466) -41.3%
---------- ---------- ---------
Total earning assets 6,865,997 6,182,594 683,403 11.1%
---------- ---------- ---------
Allowance for loan losses (74,832) (75,993) 1,161 -1.5%
Cash and due from banks 282,239 282,665 (426) -0.2%
Other assets 426,066 431,083 (5,017) -1.2%
---------- ---------- ---------
Total assets $7,499,470 $6,820,349 $ 679,121 10.0%
========== ========== =========
Int-bearing demand dep $1,171,315 $ 986,617 $ 184,698 18.7%
Savings deposits 844,838 739,027 105,811 14.3%
Time deposits less
than $100,000 1,192,351 1,308,381 (116,030) -8.9%
Time deposits of $100,000
or more 436,914 485,620 (48,706) -10.0%
---------- ---------- ---------
Total interest-bearing dep 3,645,418 3,519,645 125,773 3.6%
Fed funds pch and repos 929,774 729,862 199,912 27.4%
Short-term borrowings 463,482 408,051 55,431 13.6%
Long-term FHLB advances 455,502 325,000 130,502 40.2%
---------- ---------- ---------
Total interest-bearing
liabilities 5,494,176 4,982,558 511,618 10.3%
Nonint-bearing deposits 1,260,135 1,089,755 170,380 15.6%
Other liabilities 69,231 74,127 (4,896) -6.6%
Shareholders' equity 675,928 673,909 2,019 0.3%
---------- ---------- ---------
Total liab and equity $7,499,470 $6,820,349 $ 679,121 10.0%
========== ========== =========
Year-to-date Sep. 30,
----------------------
AVERAGE BALANCES 2003 2002 $ Change % Change
- ---------------- ---------- ---------- --------- --------
Securities AFS-taxable $1,444,250 $ 864,424 $ 579,826 67.1%
Securities AFS-nontaxable 66,585 84,296 (17,711) -21.0%
Securities HTM-taxable 283,991 620,843 (336,852) -54.3%
Securities HTM-nontaxable 90,831 89,629 1,202 1.3%
---------- ---------- ---------
Total securities 1,885,657 1,659,192 226,465 13.6%
---------- ---------- ---------
Loans 4,765,364 4,515,979 249,385 5.5%
Fed funds sold
and rev repos 27,063 27,319 (256) -0.9%
---------- ---------- ---------
Total earning assets 6,678,084 6,202,490 475,594 7.7%
---------- ---------- ---------
Allowance for loan losses (75,038) (75,580) 542 -0.7%
Cash and due from banks 296,854 281,007 15,847 5.6%
Other assets 413,530 422,107 (8,577) -2.0%
---------- ---------- ---------
Total assets $7,313,430 $6,830,024 $ 483,406 7.1%
========== ========== =========
Int-bearing demand dep $1,123,635 $ 957,584 $ 166,051 17.3%
Savings deposits 821,114 730,295 90,819 12.4%
Time deposits less
than $100,000 1,226,816 1,319,837 (93,021) -7.0%
Time deposits of $100,000
or more 445,654 518,241 (72,587) -14.0%
---------- ---------- ---------
Total interest-bearing dep 3,617,219 3,525,957 91,262 2.6%
Fed funds pch and repos 965,417 796,000 169,417 21.3%
Short-term borrowings 326,135 421,207 (95,072) -22.6%
Long-term FHLB advances 462,717 282,875 179,842 63.6%
---------- ---------- ---------
Total interest-bearing
liabilities 5,371,488 5,026,039 345,449 6.9%
Nonint-bearing deposits 1,206,457 1,063,149 143,308 13.5%
Other liabilities 65,587 66,615 (1,028) -1.5%
Shareholders' equity 669,898 674,221 (4,323) -0.6%
---------- ---------- ---------
Total liab and equity $7,313,430 $6,830,024 $ 483,406 7.1%
========== ========== =========
September 30,
----------------------
PERIOD END BALANCES 2003 2002 $ Change % Change
- ------------------- ---------- ---------- --------- --------
Sec available for sale $1,676,969 $ 940,061 $ 736,908 78.4%
Sec held to maturity 201,052 614,417 (413,365) -67.3%
---------- ---------- ---------
Total securities 1,878,021 1,554,478 323,543 20.8%
Loans 5,024,210 4,613,570 410,640 8.9%
Fed funds sold
and rev repos 59,500 189,056 (129,556) -68.5%
---------- ---------- ---------
Total earning assets 6,961,731 6,357,104 604,627 9.5%
---------- ---------- ---------
Allowance for loan losses (74,486) (75,538) 1,052 -1.4%
Cash and due from banks 284,779 354,824 (70,045) -19.7%
Intang-other identifiable 23,094 23,056 38 0.2%
Intang-mortgage servicing 48,767 46,923 1,844 3.9%
Intang-goodwill 95,877 47,982 47,895 99.8%
Other assets 293,342 304,958 (11,616) -3.8%
---------- ---------- ---------
Total assets $7,633,104 $7,059,309 $ 573,795 8.1%
========== ========== =========
Nonint-bearing deposits $1,256,697 $1,237,109 $ 19,588 1.6%
Int-bearing deposits 3,740,256 3,585,085 155,171 4.3%
---------- ---------- ---------
Total deposits 4,996,953 4,822,194 174,759 3.6%
Fed funds pch and repos 824,710 724,016 100,694 13.9%
Short-term borrowings 635,111 429,760 205,351 47.8%
Long-term FHLB advances 431,068 325,000 106,068 32.6%
Other liabilities 63,164 65,705 (2,541) -3.9%
---------- ---------- ---------
Total liabilities 6,951,006 6,366,675 584,331 9.2%
---------- ---------- ---------
Common stock 12,193 12,847 (654) -5.1%
Surplus 140,154 14,370 125,784 875.3%
Retained earnings 529,154 651,015 (121,861) -18.7%
Accum other comprehensive
income, net of taxes 597 14,402 (13,805) -95.9%
---------- ---------- ---------
Total shareholders' equity 682,098 692,634 (10,536) -1.5%
---------- ---------- ---------
Total liab and equity $7,633,104 $7,059,309 $ 573,795 8.1%
========== ========== =========
Total int-bearing liab $5,631,145 $5,063,861 $ 567,284 11.2%
========== ========== =========
PERIOD END BALANCES 9/30/03 12/31/02 $ Change % Change
- ------------------- ---------- ---------- --------- --------
Sec available for sale $1,676,969 $1,262,570 $ 414,399 32.8%
Sec held to maturity 201,052 549,197 (348,145) -63.4%
---------- ---------- ---------
Total securities 1,878,021 1,811,767 66,254 3.7%
Loans 5,024,210 4,617,366 406,844 8.8%
Fed funds sold
and rev repos 59,500 23,957 35,543 148.4%
---------- ---------- ---------
Total earning assets 6,961,731 6,453,090 508,641 7.9%
---------- ---------- ---------
Allowance for loan losses (74,486) (74,771) 285 -0.4%
Cash and due from banks 284,779 357,427 (72,648) -20.3%
Intang-other identifiable 23,094 22,788 306 1.3%
Intang-mortgage servicing 48,767 48,827 (60) -0.1%
Intang-goodwill 95,877 48,028 47,849 99.6%
Other assets 293,342 283,317 10,025 3.5%
---------- ---------- ---------
Total assets $7,633,104 $7,138,706 $ 494,398 6.9%
========== ========== =========
Nonint-bearing deposits $1,256,697 $1,251,240 $ 5,457 0.4%
Int-bearing deposits 3,740,256 3,435,056 305,200 8.9%
---------- ---------- ---------
Total deposits 4,996,953 4,686,296 310,657 6.6%
Fed funds pch and repos 824,710 954,978 (130,268) -13.6%
Short-term borrowings 635,111 275,959 359,152 130.1%
Long-term FHLB advances 431,068 475,000 (43,932) -9.2%
Other liabilities 63,164 66,939 (3,775) -5.6%
---------- ---------- --------
Total liabilities 6,951,006 6,459,172 491,834 7.6%
---------- ---------- --------
Common stock 12,193 12,609 (416) -3.3%
Surplus 140,154 188,652 (48,498) -25.7%
Retained earnings 529,154 470,317 58,837 12.5%
Accum other comprehensive
income, net of taxes 597 7,956 (7,359) -92.5%
---------- ---------- --------
Total shareholders' equity 682,098 679,534 2,564 0.4%
---------- ---------- --------
Total liab and equity $7,633,104 $7,138,706 $ 494,398 6.9%
========== ========== =========
Total int-bearing liab $5,631,145 $5,140,993 $ 490,152 9.5%
========== ========== =========
Quarter Ended Sep. 30,
----------------------
INCOME STATEMENTS 2003 2002 $ Change % Change
- ----------------- ---------- ---------- --------- --------
Int and fees on loans-FTE $ 72,035 $ 78,571 $ (6,536) -8.3%
Int on securities-taxable 12,065 21,519 (9,454) -43.9%
Int on securities-tax
exempt-FTE 3,005 3,346 (341) -10.2%
Int on fed funds sold
and rev repos 60 150 (90) -60.0%
Other interest income 14 23 (9) -39.1%
---------- ---------- ---------
Total interest income-FTE 87,179 103,609 (16,430) -15.9%
---------- ---------- ---------
Interest on deposits 14,167 19,634 (5,467) -27.8%
Interest on fed funds
pch and repos 2,269 3,058 (789) -25.8%
Other interest expense 4,918 5,636 (718) -12.7%
---------- ---------- ---------
Total interest expense 21,354 28,328 (6,974) -24.6%
---------- ---------- ---------
Net interest income-FTE 65,825 75,281 (9,456) -12.6%
Provision for loan losses 1,771 3,000 (1,229) -41.0%
---------- ---------- ---------
Net interest income after
provision-FTE 64,054 72,281 (8,227) -11.4%
---------- ---------- ---------
Service charges on
deposit accounts 14,304 12,725 1,579 12.4%
Other acct charges and fees 7,267 7,082 185 2.6%
Insurance commissions 7,708 7,107 601 8.5%
Mortgage servicing fees 4,091 4,310 (219) -5.1%
Trust service income 2,519 2,402 117 4.9%
Gains on sales of loans 5,571 2,376 3,195 134.5%
Other income (1,614) (3,114) 1,500 -48.2%
---------- ---------- ---------
Nonint inc-excl sec gains 39,846 32,888 6,958 21.2%
Security gains 57 12,033 (11,976) -99.5%
---------- ---------- ---------
Total noninterest income 39,903 44,921 (5,018) -11.2%
---------- ---------- ---------
Salaries and employee
benefits 31,434 30,568 866 2.8%
Net occupancy-premises 3,395 3,168 227 7.2%
Equipment expense 3,721 3,598 123 3.4%
Services and fees 7,806 8,093 (287) -3.5%
Amtz/impairment of intang
assets (1,389) 15,063 (16,452) -109.2%
Loan expense 2,352 2,373 (21) -0.9%
Other expense 5,397 5,618 (221) -3.9%
---------- ---------- ---------
Total noninterest expense 52,716 68,481 (15,765) -23.0%
---------- ---------- ---------
Income before income taxes 51,241 48,721 2,520 5.2%
Tax equivalent adjustment 1,994 2,188 (194) -8.9%
Income taxes 16,829 16,471 358 2.2%
---------- ---------- ---------
Net income $ 32,418 $ 30,062 $ 2,356 7.8%
========== ========== =========
Earnings per share
Basic $ 0.55 $ 0.49 $ 0.06 12.2%
========== ========== =========
Diluted $ 0.55 $ 0.49 $ 0.06 12.2%
========== ========== =========
Wtd average shares o/s
Basic 58,626,951 61,786,676 -5.1%
========== ==========
Diluted 58,898,297 61,961,033 -4.9%
========== ==========
Period end shares o/s 58,519,206 61,660,409 -5.1%
========== ==========
Dividends per share $ 0.1650 $ 0.1500 10.0%
========== ==========
Year-to-date Sep. 30,
----------------------
INCOME STATEMENTS 2003 2002 $ Change % Change
- ----------------- ---------- ---------- --------- --------
Int and fees on loans-FTE $ 215,972 $ 234,333 $ (18,361) -7.8%
Int on securities-taxable 50,610 70,197 (19,587) -27.9%
Int on securities-tax
exempt-FTE 9,282 10,380 (1,098) -10.6%
Int on fed funds sold
and rev repos 236 345 (109) -31.6%
Other interest income 37 1,368 (1,331) -97.3%
---------- ---------- ---------
Total interest income-FTE 276,137 316,623 (40,486) -12.8%
---------- ---------- ---------
Interest on deposits 45,882 61,432 (15,550) -25.3%
Interest on fed funds
pch and repos 8,096 9,946 (1,850) -18.6%
Other interest expense 14,681 16,566 (1,885) -11.4%
---------- ---------- ---------
Total interest expense 68,659 87,944 (19,285) -21.9%
---------- ---------- ---------
Net interest income-FTE 207,478 228,679 (21,201) -9.3%
Provision for loan losses 7,420 10,307 (2,887) -28.0%
---------- ---------- ---------
Net interest income after
provision-FTE 200,058 218,372 (18,314) -8.4%
---------- ---------- ---------
Service charges on
deposit accounts 40,054 36,546 3,508 9.6%
Other acct charges and fees 21,028 21,286 (258) -1.2%
Insurance commissions 16,458 13,580 2,878 21.2%
Mortgage servicing fees 12,652 12,925 (273) -2.1%
Trust service income 7,176 7,413 (237) -3.2%
Gains on sales of loans 14,715 6,050 8,665 143.2%
Other income (1,137) (5,792) 4,655 -80.4%
---------- ---------- ---------
Nonint inc-excl sec gains 110,946 92,008 18,938 20.6%
Security gains 12,226 12,549 (323) -2.6%
---------- ---------- ---------
Total noninterest income 123,172 104,557 18,615 17.8%
---------- ---------- ---------
Salaries and employee
benefits 96,855 89,030 7,825 8.8%
Net occupancy-premises 9,541 8,863 678 7.6%
Equipment expense 11,104 11,357 (253) -2.2%
Services and fees 23,696 23,720 (24) -0.1%
Amtz/impairment of intang
assets 19,015 18,886 129 0.7%
Loan expense 7,155 7,314 (159) -2.2%
Other expense 15,023 15,015 8 0.1%
---------- ---------- ---------
Total noninterest expense 182,389 174,185 8,204 4.7%
---------- ---------- ---------
Income before income taxes 140,841 148,744 (7,903) -5.3%
Tax equivalent adjustment 6,261 6,866 (605) -8.8%
Income taxes 46,514 50,084 (3,570) -7.1%
---------- ---------- ---------
Net income $ 88,066 $ 91,794 $ (3,728) -4.1%
========== ========== =========
Earnings per share
Basic $ 1.49 $ 1.47 $ 0.02 1.4%
========== ========== =========
Diluted $ 1.48 $ 1.46 $ 0.02 1.4%
========== ========== =========
Wtd average shares o/s
Basic 59,214,354 62,608,357 -5.4%
========== ==========
Diluted 59,406,010 62,800,509 -5.4%
========== ==========
Period end shares o/s 58,519,206 61,660,409 -5.1%
========== ==========
Dividends per share $ 0.4950 $ 0.4500 10.0%
========== ==========
September 30,
----------------------
NONPERFORMING ASSETS 2003 2002 $ Change % Change
- -------------------- ---------- ---------- --------- --------
Nonaccrual loans $ 26,857 $ 30,998 $ (4,141) -13.4%
Restructured loans - - -
---------- ---------- ---------
Total nonperforming loans 26,857 30,998 (4,141) -13.4%
Other real estate 6,434 5,983 451 7.5%
---------- ---------- ---------
Total nonperforming assets 33,291 36,981 (3,690) -10.0%
Loans past due over 90 days 3,283 3,145 138 4.4%
---------- ---------- ---------
Total nonperforming
assets plus past
due over 90 days $ 36,574 $ 40,126 $ (3,552) -8.9%
========== ========== =========
Quarter Ended Sep. 30,
----------------------
ALLOWANCE FOR LOAN LOSSES 2003 2002 $ Change % Change
- ------------------------- ---------- ---------- --------- --------
Beginning Balance $ 74,819 $ 75,900 $ (1,081) -1.4%
Charge-offs (4,693) (5,780) 1,087 -18.8%
Recoveries 2,589 2,418 171 7.1%
Provision for loan losses 1,771 3,000 (1,229) -41.0%
---------- ---------- ---------
Ending Balance $ 74,486 $ 75,538 $ (1,052) -1.4%
========== ========== =========
Year-to-date Sep. 30,
----------------------
ALLOWANCE FOR LOAN LOSSES 2003 2002 $ Change % Change
- ------------------------- ---------- ---------- --------- --------
Beginning Balance $ 74,771 $ 75,534 $ (763) -1.0%
Charge-offs (14,675) (17,281) 2,606 -15.1%
Recoveries 6,970 6,978 (8) -0.1%
Provision for loan losses 7,420 10,307 (2,887) -28.0%
---------- ---------- ---------
Ending Balance $ 74,486 $ 75,538 $ (1,052) -1.4%
========== ========== =========
Quarter Ended Year-to-date
--------------- ---------------
September 30, September 30,
--------------- ---------------
RATIOS 2003 2002 2003 2002
- ------ ------ ------ ------ ------
ROA 1.71% 1.75% 1.61% 1.80%
ROE 19.03% 17.70% 17.58% 18.20%
Equity generation rate 13.32% 12.28% 11.74% 12.63%
EOP equity/ EOP assets 8.94% 9.81% 8.94% 9.81%
Average equity/average assets 9.01% 9.88% 9.16% 9.87%
Interest margin - Yield - FTE 5.03% 6.65% 5.52% 6.83%
Interest margin - Cost - FTE 1.23% 1.82% 1.37% 1.90%
Net interest margin - FTE 3.80% 4.83% 4.15% 4.93%
Rate on interest-bearing liab 1.54% 2.26% 1.71% 2.34%
Efficiency ratio 54.63% 51.85% 53.95% 50.63%
Expense ratio 0.74% 2.28% 1.43% 1.77%
Net charge offs/average loans 0.17% 0.29% 0.22% 0.31%
Prov for loan losses/average loans 0.14% 0.26% 0.21% 0.31%
Nonperforming loans/total loans 0.53% 0.67% 0.53% 0.67%
Nonperforming assets/total loans 0.66% 0.80% 0.66% 0.80%
Nonperf assets/total loans+ORE 0.66% 0.80% 0.66% 0.80%
ALL/nonperforming loans 277.34% 243.69% 277.34% 243.69%
ALL/total loans 1.48% 1.64% 1.48% 1.64%
Net loans/total assets 64.85% 64.28% 64.85% 64.28%
Quarter Ended Sept. 30,
-----------------------
COMMON STOCK PERFORMANCE 2003 2002
- ------------------------ -------- --------
Market value of stock-Close $ 27.130 $ 22.800
Market value of stock-High $ 28.000 $ 26.150
Market value of stock-Low $ 25.030 $ 21.290
Book value of stock $ 11.66 $ 11.23
Tangible book value of stock $ 9.62 $ 10.08
Tangible equity $563,127 $621,596
Market/Book value of stock 232.68% 203.03%
Price/Earnings ratio 12.43 11.73
Dividend payout 30.00% 30.61%
Year-to-date Sept. 30,
----------------------
COMMON STOCK PERFORMANCE 2003 2002
- ------------------------ -------- --------
Market value of stock-Close $ 27.130 $ 22.800
Market value of stock-High $ 28.000 $ 27.140
Market value of stock-Low $ 22.560 $ 21.290
Book value of stock $ 11.66 $ 11.23
Tangible book value of stock $ 9.62 $ 10.08
Tangible equity $563,127 $621,596
Market/Book value of stock 232.68% 203.03%
Price/Earnings ratio 13.62 11.60
Dividend payout 33.22% 30.61%
September 30,
----------------------
OTHER DATA 2003 2002
- ---------- ------- -------
EOP Employees - FTE 2,365 2,450
Quarter Ended
----------------------
AVERAGE BALANCES 9/30/2003 6/30/2003 $ Change % Change
- ---------------- ---------- ---------- --------- --------
Securities AFS-taxable $1,595,036 $1,497,929 $ 97,107 6.5%
Securities AFS-nontaxable 63,940 65,862 (1,922) -2.9%
Securities HTM-taxable 162,393 284,115 (121,722) -42.8%
Securities HTM-nontaxable 90,841 90,708 133 0.1%
---------- ---------- ---------
Total securities 1,912,210 1,938,614 (26,404) -1.4%
---------- ---------- ---------
Loans 4,933,252 4,742,289 190,963 4.0%
Fed funds sold
and rev repos 20,535 31,055 (10,520) -33.9%
---------- ---------- ---------
Total earning assets 6,865,997 6,711,958 154,039 2.3%
---------- ---------- ---------
Allowance for loan losses (74,832) (75,142) 310 -0.4%
Cash and due from banks 282,239 306,173 (23,934) -7.8%
Other assets 426,066 404,207 21,859 5.4%
---------- ---------- ---------
Total assets $7,499,470 $7,347,196 $ 152,274 2.1%
========== ========== =========
Int-bearing demand dep $1,171,315 $1,157,982 $ 13,333 1.2%
Savings deposits 844,838 832,978 11,860 1.4%
Time deposits less
than $100,000 1,192,351 1,226,988 (34,637) -2.8%
Time deposits of $100,000
or more 436,914 436,316 598 0.1%
---------- ---------- ---------
Total interest-bearing dep 3,645,418 3,654,264 (8,846) -0.2%
Fed funds pch and repos 929,774 1,040,233 (110,459) -10.6%
Short-term borrowings 463,482 271,112 192,370 71.0%
Long-term FHLB advances 455,502 457,667 (2,165) -0.5%
---------- ---------- ---------
Total int-bearing
liabilities 5,494,176 5,423,276 70,900 1.3%
Nonint-bearing deposits 1,260,135 1,199,182 60,953 5.1%
Other liabilities 69,231 58,474 10,757 18.4%
Shareholders' equity 675,928 666,264 9,664 1.5%
---------- ---------- ---------
Total liab and equity $7,499,470 $7,347,196 $ 152,274 2.1%
========== ========== =========
Period Ended
----------------------
PERIOD END BALANCES 9/30/2003 6/30/2003 $ Change % Change
- ------------------- ---------- ---------- --------- --------
Sec available for sale $1,676,969 $1,536,935 $ 140,034 9.1%
Sec held to maturity 201,052 312,001 (110,949) -35.6%
---------- ---------- ---------
Total securities 1,878,021 1,848,936 29,085 1.6%
Loans 5,024,210 4,825,953 198,257 4.1%
Fed funds sold
and rev repos 59,500 19,561 39,939 204.2%
---------- ---------- ---------
Total earning assets 6,961,731 6,694,450 267,281 4.0%
---------- ---------- ---------
Allowance for loan losses (74,486) (74,819) 333 -0.4%
Cash and due from banks 284,779 345,050 (60,271) -17.5%
Intang-other identifiable 23,094 21,062 2,032 9.6%
Intang-mortgage servicing 48,767 37,680 11,087 29.4%
Intangibles-goodwill 95,877 48,028 47,849 99.6%
Other assets 293,342 301,848 (8,506) -2.8%
---------- ---------- ---------
Total assets $7,633,104 $7,373,299 $ 259,805 3.5%
========== ========== =========
Nonint-bearing deposits $1,256,697 $1,306,795 $ (50,098) -3.8%
Interest-bearing deposits 3,740,256 3,659,985 80,271 2.2%
---------- ---------- ---------
Total deposits 4,996,953 4,966,780 30,173 0.6%
Fed funds pch and repos 824,710 976,051 (151,341) -15.5%
Short-term borrowings 635,111 239,605 395,506 165.1%
Long-term FHLB advances 431,068 457,624 (26,556) -5.8%
Other liabilities 63,164 68,880 (5,716) -8.3%
---------- ---------- ---------
Total liabilities 6,951,006 6,708,940 242,066 3.6%
---------- ---------- ---------
Common stock 12,193 12,296 (103) -0.8%
Surplus 140,154 152,981 (12,827) -8.4%
Retained earnings 529,154 506,401 22,753 4.5%
Accum other comprehensive
income (loss), net of
taxes 597 (7,319) 7,916 -108.2%
---------- ---------- ---------
Total shareholders' equity 682,098 664,359 17,739 2.7%
---------- ---------- ---------
Total liab and equity $7,633,104 $7,373,299 $ 259,805 3.5%
========== ========== =========
Total int-bearing liab $5,631,145 $5,333,265 $ 297,880 5.6%
========== ========== =========
Quarter Ended
----------------------
INCOME STATEMENTS 9/30/2003 6/30/2003 $ Change % Change
- ----------------- ---------- ---------- -------- --------
Int and fees on loans-FTE $ 72,035 $ 72,146 $ (111) 0.2%
Int on securities-taxable 12,065 18,390 (6,325) -34.4%
Int on securities-tax
exempt-FTE 3,005 3,094 (89) -2.9%
Int on fed funds sold
and rev repos 60 94 (34) -36.2%
Other interest income 14 11 3 27.3%
---------- ---------- --------
Total interest income-FTE 87,179 93,735 (6,556) -7.0%
---------- ---------- --------
Interest on deposits 14,167 15,653 (1,486) -9.5%
Interest on fed funds
pch and repos 2,269 3,101 (832) -26.8%
Other interest expense 4,918 4,731 187 4.0%
---------- ---------- --------
Total interest expense 21,354 23,485 (2,131) 9.1%
---------- ---------- --------
Net interest income-FTE 65,825 70,250 (4,425) -6.3%
Provision for loan losses 1,771 2,649 (878) -33.1%
---------- ---------- --------
Net interest income after
provision-FTE 64,054 67,601 (3,547) -5.2%
---------- ---------- --------
Service charges on
deposit accounts 14,304 13,070 1,234 9.4%
Other acct charges and fees 7,267 7,136 131 1.8%
Insurance commissions 7,708 4,963 2,745 55.3%
Mortgage servicing fees 4,091 4,235 (144) -3.4%
Trust service income 2,519 2,346 173 7.4%
Gains on sales of loans 5,571 5,251 320 6.1%
Other income (1,614) 1,064 (2,678) -251.7%
---------- ---------- --------
Nonint inc-excl sec gains 39,846 38,065 1,781 4.7%
Security gains 57 4,021 (3,964) 98.6%
---------- ---------- --------
Total noninterest income 39,903 42,086 (2,183) -5.2%
---------- ---------- --------
Salaries and employee
benefits 31,434 29,497 1,937 6.6%
Net occupancy-premises 3,395 3,160 235 7.4%
Equipment expense 3,721 3,673 48 1.3%
Services and fees 7,806 8,011 (205) -2.6%
Amtz/impairment of intang
assets (1,389) 8,749 (10,138) -115.9%
Loan expense 2,352 2,432 (80) -3.3%
Other expense 5,397 4,425 972 22.0%
---------- ---------- --------
Total noninterest expense 52,716 59,947 (7,231) -12.1%
---------- ---------- --------
Income before income taxes 51,241 49,740 1,501 3.0%
Tax equivalent adjustment 1,994 2,061 (67) -3.3%
Income taxes 16,829 16,515 314 1.9%
---------- ---------- --------
Net income $ 32,418 $ 31,164 $ 1,254 4.0%
========== ========== ========
Earnings per share
Basic $ 0.55 $ 0.53 $ 0.02 3.8%
========== ========== ========
Diluted $ 0.55 $ 0.53 $ 0.02 3.8%
========== ========== ========
Wtd average shares o/s
Basic 58,626,951 59,117,961
========== ==========
Diluted 58,898,297 59,294,330
========== ==========
Period end shares o/s 58,519,206 59,014,613
========== ==========
Dividends per share $ 0.1650 $ 0.1650
========== ==========
Period Ended
---------------------
NONPERFORMING ASSETS 9/30/2003 6/30/2003 $ Change % Change
- -------------------- --------- --------- --------- --------
Nonaccrual loans $ 26,857 $ 28,916 $ (2,059) -7.1%
Restructured loans - - -
--------- --------- ---------
Total nonperforming loans 26,857 28,916 (2,059) -7.1%
Other real estate 6,434 7,116 (682) -9.6%
--------- --------- ---------
Total nonperforming assets 33,291 36,032 (2,741) -7.6%
Loans past due over 90 days 3,283 2,183 1,100 50.4%
--------- --------- ---------
Total nonperforming
assets plus past
due over 90 days $ 36,574 $ 38,215 $ (1,641) -4.3%
========= ========= =========
Quarter Ended
---------------------
ALLOWANCE FOR LOAN LOSSES 9/30/2003 6/30/2003 $ Change % Change
- ------------------------- --------- --------- --------- --------
Beginning Balance $ 74,819 $ 74,867 $ (48) -0.1%
Charge-offs (4,693) (4,791) 98 -2.0%
Recoveries 2,589 2,094 495 23.6%
Provision for loan losses 1,771 2,649 (878) -33.1%
--------- --------- ---------
Ending Balance $ 74,486 $ 74,819 $ (333) -0.4%
========= ========= =========
Quarter Ended
--------------------
RATIOS 9/30/2003 6/30/2003
- ------ --------- ---------
ROA 1.71% 1.70%
ROE 19.03% 18.76%
Equity generation rate 13.32% 12.92%
EOP equity/ EOP assets 8.94% 9.01%
Average equity/average assets 9.01% 9.07%
Interest margin - Yield - FTE 5.03% 5.60%
Interest margin - Cost - FTE 1.23% 1.40%
Net interest margin - FTE 3.80% 4.20%
Rate on interest-bearing liabilities 1.54% 1.74%
Efficiency ratio 54.63% 53.06%
Expense ratio 0.74% 1.31%
Net charge offs/average loans 0.17% 0.23%
Provision for loan losses/average loans 0.14% 0.22%
Nonperforming loans/total loans 0.53% 0.60%
Nonperforming assets/total loans 0.66% 0.75%
Nonperforming assets/total loans+ORE 0.66% 0.75%
ALL/nonperforming loans 277.34% 258.75%
ALL/total loans 1.48% 1.55%
Net loans/total assets 64.85% 64.44%
Quarter Ended
--------------------
COMMON STOCK PERFORMANCE 9/30/2003 6/30/2003
- ------------------------ --------- ---------
Market value of stock-Close $ 27.130 $ 25.470
Market value of stock-High $ 28.000 $ 27.000
Market value of stock-Low $ 25.030 $ 23.540
Book value of stock $ 11.66 $ 11.26
Tangible book value of stock $ 9.62 $ 10.09
Tangible equity $563,127 $595,269
Market/Book value of stock 232.68% 226.20%
Price/Earnings ratio 12.43 11.98
Dividend payout 30.00% 31.13%
OTHER DATA 9/30/2003 6/30/2003
- ---------- --------- ---------
EOP Employees - FTE 2,365 2,286
Note 1- Business Combinations
On August 29, 2003, Trustmark acquired seven Florida branches of
The Banc Corporation of Birmingham, Alabama, in a business
combination accounted for by the purchase method of accounting.
These branches, known as the Emerald Coast Division, serve the
markets from Destin to Panama City. In connection with the
transaction, Trustmark paid a $46.8 million deposit premium in
exchange for $232.8 million in assets and $209.2 million in
deposits and other liabilities. Assets consisted of $224.3
million in loans, $6.8 million in premises and equipment and $1.7
million in other assets. These assets and liabilities have been
recorded at fair value based on market conditions and risk
characteristics at the acquisition date. Loans were recorded at a
$1.9 million discount, consisting of a discount for general
credit risk of $3.5 million offset by a market premium of $1.6
million. This net discount will be recognized as interest income
over the estimated life of the loans. Excess costs over tangible
net assets acquired totaled $49.5 million, of which $1.7 million
and $47.8 million have been allocated to core deposits and
goodwill, respectively. Trustmark's financial statements include
the results of operations for this acquisition from the merger
date.
Note 2- Net Interest Margin
Trustmark's third quarter interest margin decreased by $4.1
million as a result of increased premium amortization on mortgage
related securities to $7.8 million for the quarter ended
September 30, 2003, from $3.7 million for the quarter ending June
30, 2003. Mortgage rates fell to historically low levels in June
2003, prompting a significant refinance boom across the country.
As excess principal pay downs occurred during the third quarter
on these securities, net premium amortization accelerated. As
mortgage rates have risen as much as 50 basis points during the
third quarter, we do not expect prepayments or net premium
amortization to be as significant during the fourth quarter.
Note 3 - Other Income
The following table includes the components of other income:
Quarter Ended
-------------------------------
9/30/2003 6/30/2003 9/30/2002
--------- --------- ---------
Changes in fair value:
Interest rate contracts $ 131 $ (359) $ (3,104)
Mortgage derivative contracts (2,266) 1,107 -
Other miscellaneous 521 316 (10)
--------- --------- ---------
Total other income $ (1,614) $ 1,064 $ (3,114)
========= ========= =========
Year-to-date
--------------------
9/30/2003 9/30/2002
--------- ---------
Changes in fair value:
Interest rate contracts $ (497) $ (6,027)
Mortgage derivative contracts (1,857) -
Other miscellaneous 1,217 235
--------- ---------
Total other income $ (1,137) $ (5,792)
========= =========
Note 4 - Early Retirement Program
In February 2003, Trustmark announced a voluntary early
retirement program (ERP) for associates age 58 and above with ten
or more years of service. This program was accepted by 116
associates, or 4.75% of Trustmark's workforce. An after-tax
charge of approximately $4.1 million, or $0.07 per share, was
recognized in Trustmark's first quarter 2003 earnings. Management
believes this information is useful because it allows investors
to easily discern the impact of the ERP on Trustmark's results of
operations and ratios, as demonstrated in the following table:
Year-to-date
--------------------
9/30/2003 9/30/2002
--------- ---------
Net income, as reported $ 88,066 $ 91,794
Add back ERP charge, net of tax 4,085 -
--------- ---------
Net income adjusted for ERP $ 92,151 $ 91,794
========= =========
Earnings per share adjusted for ERP
Basic earnings per share, as reported $ 1.49 $ 1.47
Effect of ERP charge 0.07 -
--------- ---------
Basic earnings per share, adjusted $ 1.56 $ 1.47
========= =========
Diluted earnings per share, as reported $ 1.48 $ 1.46
Effect of ERP charge 0.07 -
--------- ---------
Diluted earnings per share, adjusted $ 1.55 $ 1.46
========= =========
Ratios adjusted for ERP
ROA 1.68% 1.80%
ROE 18.39% 18.20%
Note 5 - Amortization/Impairment of Intangible Assets
The following table includes the components of amortization/
impairment of intangible assets:
Quarter Ended
-------------------------------
9/30/2003 6/30/2003 9/30/2002
--------- --------- ---------
Amortization:
Core deposits $ 526 $ 725 $ 729
Insurance intangible 142 138 138
Mtg servicing rights 2,887 4,665 3,410
Impairment of mortgage
servicing rights (4,944) 3,221 10,786
--------- --------- ---------
Total amort/impairment
of intangible assets $ (1,389) $ 8,749 $ 15,063
========= ========= =========
Year-to-date
--------------------
9/30/2003 9/30/2002
--------- ---------
Amortization:
Core deposits $ 1,977 $ 2,202
Insurance intangible 418 138
Mtg servicing rights 11,621 7,760
Impairment of mortgage
servicing rights 4,999 8,786
--------- ---------
Total amort/impairment
of intangible assets $ 19,015 $ 18,886
========= =========
Impairment for mortgage servicing rights is determined using
estimated fair values based on specific risk characteristics of
the underlying mortgages. During the quarter ended September 30,
2003, Trustmark expanded its risk characteristics used in
evaluating mortgage servicing rights to include interest rates on
the underlying mortgages. This change in estimate was necessary
because of the recent volatile interest rate environment. This
change in estimate reduced the impairment recovery during the
quarter ended September 30, 2003, by approximately $2.7 million
before tax ($1.7 million after tax).